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The film tells of two very different men who share a prison cell in Brazil during the Brazilian military government: Valentin Arregui, who is imprisoned (and has been tortured) due to his activities on behalf of a leftist revolutionary group, and Luis Molina, a homosexual in prison for having sex with an underage boy.

Molina passes the time by recounting memories from one of his favorite films, a wartime romantic thriller that's also a Nazipropaganda film. He weaves the characters into a narrative meant to comfort Arregui and distract him from the harsh realities of political imprisonment and the separation from his lover, Marta. Arregui allows Molina to penetrate some of his defensive self and opens up. Despite Arregui occasionally snapping at Molina over his rather shallow views of political cinema, an unlikely friendship develops between the two.

As the story develops, it becomes clear that Arregui is being poisoned by his jailers to provide Molina with a chance to befriend him, and that Molina is spying on Arregui on behalf of the Brazilian secret police. Molina has namely been promised a parole if he succeeds in obtaining information that will allow the secret police to find the revolutionary group's members.

Molina falls in love with Arregui, and Arregui responds after a fashion, culminating in a physical consummation of their love on Molina's last night in prison. Molina is granted parole in the hopes Arregui will reveal information about his contacts when he knows Molina will be out of prison. Arregui provides Molina with a telephone number and message for his comrades. Molina at first refuses to take the number, fearing the consequences of treason, but he relents, and he and Arregui bid farewell with a kiss.

In the final scenes, Molina calls the telephone number, and a meeting is arranged with the revolutionary group. But the secret police have had Molina under surveillance, and a gun battle ensues, with the revolutionaries, assuming Molina has betrayed them, shooting him. As he wanders the streets wounded, the policemen catch up with him and demand that he disclose the telephone number in exchange for them taking him to the hospital for treatment, but Molina refuses and succumbs to his wounds. On the orders of the homophobic police chief (Milton Gonçalves), the policemen dump Molina's body in a rubbish pit and fabricate a story about his death and involvement with the revolutionary group.

Meanwhile, back in the prison Arregui is being treated after being tortured once again. As the doctor administers him morphine to help him sleep, risking his job in the process, Arregui escapes into a dream where he is on a tropical island with Marta.

The story features a "film within a film", featuring Luis Molina episodically telling Valentin Arregui the plot of a fictional film called Her Real Glory ostensibly produced in Germany during the Second World War by the Nazis. The "film within a film" mirrors the story of Molina and Arregui.[citation needed]

The film received positive reviews. Review aggregation website Rotten Tomatoes gives it a rating of 88% based on reviews from 24 critics.[5]

Roger Ebert gave the film three and a half stars out of four, calling it a "film of insights and surprises" and remarking that "the performances are wonderful."[6]James Berardinelli gave Kiss of the Spider Woman three stars out of four, calling it "a fascinating character study." Reviewing the film in 2009, Berardinelli claimed that it "has lost none of its power over the years," and felt that it was more deserving of the Best Picture Academy Award than Out of Africa.[7]